Denis Tegg is spokesperson for Coromandel Watchdog, the group that lead the fight against mining the last time it was the Right’s big new idea in the 1980s and early 1990s. It was Coromandel Watchdog’s efforts that principally led to the creation of Schedule 4 of the Conservation Act, which protects National Parks and some other DoC land from mining. He writes:
A mining lobbyist has produced grossly inflated back of the envelope figures for the “value” of New Zealand’s mineral resources. These have been used relentlessly by the Government and the media has quoted them almost unchallenged [this was written before TVOne got on to the job].
So I thought I would do some back of the envelope calculations myself.
Page 28 of the Government’s Discussion Paper Appendix 1 says that the value of potential resources mostly gold and silver on the Coromandel is $54 billion.
The next paragraph says mineral production from the open pit mine at Martha Hill Waihi is valued at $225 million per annum.
The average life of a modern mine is around 10 years so the value of total production per open pit mine would be $2.25 billion.
Let’s put aside for the moment that most of this “value” heads offshore. Or that Newmont’s own Social Impact Report says mining town Waihi has high unemployment levels, double the rate of welfare dependency and lower wage levels than nearby towns of the same size. Or that it score 10 out of 10 for “social deprivation” (10 is worst)
So how many open pit mines “worth” $2.25 billion do we need to have operating to achieve the potential $54 million of resources? The back of my envelope gives the answer. 24 open pit mines on the Coromandel!
Mr Brownlee won’t rule out open pit mining but under pressure in Parliament on 23 March John Key said he (note he not the Government) would rule out open cast mines on the Coromandel.
Let’s not be churlish about the total confusion and panic in the Government ranks. Let’s accept Key’s “on the hoof” assurances that there will not be any open pit mines.
Which means only underground mines are left to achieve the digging out of this incredible $54 billion potential.
The back of my envelope tells me that underground mines are about 1/20 of the size of an open pit mine. So we are going to need nearly 500 underground mines on the Coromandel, each operating for 10 years to achieve this stupendous $54 billion-dollar bonanza!
If you are looking for further evidence that the Government’s figures are wildly exaggerated its on page 23 of the discussion paper.
There it states that after 66 years of intense activity the Thames goldfield produced just $3.6 billion of gold at today’s prices. Yet by some miracle, the Thames and another Coromandel gold prospects are going to lead us to economic nirvana in the next few years and we are going to achieve a $54 billion-dollar bonanza.
But wait there is more — Minerals Association lobbyist Doug Gordon says only one in 1000 prospects ever turn into a workable economic mine. So Gordon’s statements mean we have to divide the potential $54 billion by 1000 — giving a figure of only $54 million straight off the bat.
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